USD/CAD Daily Fundamental Forecast – August 30, 2017

The USDCAD pair had a very busy day yesterday but it basically ended the day at the same place where it had opened. It had made a whole round during the course of the day as it had moved above 1.25 during the end of Monday and then we saw the pair weaken through the London session yesterday but it finally closed above 1.25 by the end of the day.

USDCAD Looking Very Choppy

It was such a volatile day not only for this pair but across the markets as well as the London markets came online for the first day of the week yesterday due to the holiday on Monday. This gave the traders there, the first opportunity to show their reaction to the speeches from Draghi and Yellen on Friday and as expected, they began the day by selling off dollar as Yellen had failed to address the weakness of the dollar in her speech which was an indication to the market that the Fed was fine with the weakness and maybe they would be following it as a policy going forward, under the new regime in the US.

This selling pushed the pair below 1.25 and it once again bounced from the lows of the range. As the US session kicked in, the pressure on the dollar eased and we saw it recover all across the board which once again led to the pair moving higher. Currently, the pair is trading above 1.25 as of now. This is something that we had warned of, a couple of days back, when we had said that the prices are back in the lows of the range, which exposes it to the risk of another bounce. The action is likely to be choppy in the short term and it is better for traders to wait till dust settles.

Looking at the rest of the day, we have the Preliminary GDP data from the US and also the ADP employment report, which is likely to point towards the strength of the US economy and whether it is likely that the Fed is going to hike this year which is likely to have an impact on the USDCAD pair.